December 15 (SeeNews) - The Slovenian economy is expected to contract 7.6% this year due to the coronavirus pandemic, before recovering partially by growing 3.1% in 2021, the central bank said on Tuesday.
The pace of the recovery will depend primarily on the success of the Covid-19 vaccine implementation, Banka Slovenije said it its December macroeconomic projections report.
"The contraction in economic activity is largely mitigated by economic policy measures – in their absence, economic activity would have declined further by about a third this year," the report noted.
The economic policy measures have also helped prevent higher growth in the number of unemployed.
Banka Slovenije also said that considering the current uncertainty in the economy, linked with the fast changing epidemiological situation, it has prepared a pessimistic and an optimistic scenario of its macroeconomic projections.
The optimistic scenario envisages a successful end to the second wave of Covid-19 already by the end of this year, and a subsequent rescinding of the restrictions towards the end of December. In this case, the gross domestic product (GDP) would return to its pre-crisis level already next year.
However, if the epidemiological situation continues to worsen and the validity of the restrictive measures is prolonged, the GDP could continue to contract in 2021 as well, and start returning to its pre-crisis level only towards the end of 2022.
Slovenia's economic output decreased by a real 2.6% year-on-year in the third quarter of 2020 but was 12.4% higher compared to the second quarter when the country introduced its first coronavirus lockdown, the country's statistical office has said.
In the second quarter, the GDP decreased by an annual 13% and fell by 9.6% on the first quarter, whereas in January-September, the domestic economy shrank by a real 6.0% on the year.
The government in Ljubljana projects a GDP drop of 6.7% in 2020.
In October, the International Monetary Fund (IMF) said it expects the Slovenian economic output to shrink by 6.7% this year due to the coronavirus crisis, less than the previously predicted 8% contraction.
Also in October, the European Bank for Reconstruction and Development (EBRD) said it expects Slovenia's economy to decline by 7.5% this year, revising its forecast for a 5.5% decline made in May.
Here are some of Banka Slovenije's December 2020 macroeconomic projections:
|
2020 |
2021 |
2022 |
GDP (% change) |
-7.6 |
3.1 |
4.5 |
Inflation (avg annual, % change) |
-0.2 |
0.9 |
1.3 |
Exports (% change) |
-11.4 |
7.2 |
6.8 |
Imports (% change) |
-13.2 |
9.2 |
7.3 |
Employment (% change) |
-1.5 |
-0.3 |
1.4 |
Unemployment (% change) |
5.4 |
5.6 |
4.8 |